The writer Samuel Johnson once said: “When a man is tired of London, he is tired of life.” Increasing numbers of homebuyers would seem to agree, as the share of non-Londoners buying in the capital hit a three-year high in 2023.
Of the £1m-plus homes sold in London last year, 11.9% were bought by people from outside the city, equating to 13,188 properties. This is the second highest percentage of non-Londoner purchases since our records began in 2009 and is up from 11.1 percent in 2022 and 11.5 percent the year before that.
The numbers indicate that the race for space from the city to the countryside, which became a huge trend during the pandemic era, has now run its course. The phenomenon, which was fuelled by rock-bottom mortgage rates, the stamp duty holiday, lockdowns and widespread home-working, has been reversed as workers are increasingly required to come into the office and as countryside living loses its allure for those who made the move on the basis of being able to work from home full time.
By far the largest proportion of non-Londoners buying in the capital in 2023 came from the South East of England. They accounted for 53.8% of purchases, a significant increase on 2019’s figure of 46.4%. In addition, last year marked the second consecutive year in which buyers from the South East made up more than half of buyers in London. There was also a notable uptick in the proportion of people from the South West buying properties in the capital last year – with numbers rising from 2.3% in 2019 to 7.9%.
While the second-highest proportion of non-London buyers came from the East of England last year, accounting for 23.7% of sales, this is a significant decline from the 38.7% figure recorded before the pandemic.
Looking to buy a property in London? Read our guide on the top questions to ask when viewing a property.
As well as rediscovering the conveniences of London now that life has returned to a new normal, buyers have been taking advantage of the stagnation in property prices in the capital. Over the last year, property prices in Great Britain have fallen by 2%, whereas in London, the decline has been double that, at -4%. This is where higher interest rates have weighed more heavily. Over five years, the average home in Britain has seen its price increase by 24%, whereas London has lagged, with the average property rising in value by only 9%.
In November 2023, the average home in Great Britain cost £290,075, whereas in London it was £517,814, or 79% more. However, this price gap is the smallest it has been since September 2012 and is a significant decline from spring 2016 when the London premium peaked – in March to May of that year, a home in the capital cost 120% more than the British average.
We are now in the later stages of the house price cycle, which means it’s generally northern areas that are recording stronger price growth as they play catch-up with the South. We think that 2025 will mark the start of a new property market cycle, with London once again starting to outperform all other regions for the first time since 2015, recording 5% annual price growth. With prices in the capital set to rise faster than elsewhere, we’re probably close to the turning point where making the leap into the M25 is at its easiest.
Read More:
Discover our wide selection of London properties
